Drivers could also be given a new right to compensation if they are incorrectly fined for parking their cars in the wrong place.

Ministers will also propose giving people longer to return to their cars once their allotted parking time is up, and place a new duty on councils to “review” unnecessary yellow lines if enough local people are demanding it.

The announcement is a boost for the Telegraph’s Reinvent the High Street to put the heart back in the country’s traditional high streets.

The reforms will go out to consultation for six weeks from next month, and could be in force by January, aides said.

Eric Pickles, the Local Government secretary, said: “We want to rein in these over-zealous and unfair rules on parking enforcement, so it focuses on supporting high streets and motorists, not raising money.

“Parking spy cameras are just one example of this and a step too far. Public confidence is strengthened in CCTV if it is used to tackle crime, not to raise money for council officers.”

Councils are presently banned from using parking revenues as a source of revenue but despite traffic volumes falling they have seen this income rise.

Profits for local authorities in England from parking fines have soared under the past three Labour Governments, from £223million to £512million in the 13 years to 2010/11.

The fines are have continued to rise under the Coalition, with councils now forecast to make a £635million profit from fines in 2013/14. The most recent statistics suggested that nine million parking fines are issued every year - representing one fine for every two cars on the country’s roads.

Councils routinely use CCTV cameras to generate millions of parking tickets, despite the Department for Transport saying that CCTV should only be used when it is impractical to use traffic wardens.

Currently 75 local authorities - one in four of those in England - have been given permission to use CCTV or “approved devices” for parking enforcement.

A consultation published today will suggest the Government amends legislation underpinning the Traffic Management Act 2004 to outlaw the practice.

The change will only apply to vehicles which are parked on the street, which are patrolled by council traffic wardens, and not to private car parks.

Parking warden would not be prevented from taking a photograph to enforce on-street parking rules; but it would stop CCT V cameras and ‘spy cars’ – which are increasingly used by councils – to catch out drivers.

In a briefing paper accompanying the announcement, Mr Pickles’ aides said that using CCTV to enforce parking rules was “detrimental to natural justice” because often drivers received penalty notices in the post weeks after the offence was committed.

Other proposals announced by the Government today include:

[blob] Changing legislation to reimburse motorists the “cost and expense” of appealing parking fines if they are successful. Currently the rules only apply to people fighting planning applications.

[blob] Rewriting the current law on the waiting period allowed for motorists before a fine is issued, increasing it from five minutes to 15 minutes;

[blob] Amending the law to stop councils from using bailiffs to collect parking fines. It is estimated that 10 per cent of parking fines are collected by bailiffs;

[blob] Allowing local residents to petition to force councils to review how many yellow lines have been painted on their streets. Once the petition cleared a certain level local authorities would have to act.

A report from the Association of Town & City Management and the British Parking Association in January accused councils of killing high street shops in small towns across the country by overcharging for parking.

The report - ‘Re-think! Parking on the High Street’ - found that “some mid-sized and smaller town centres may be overcharging for car parking in relation to the amenities on offer and suggests that this is contributing to their decline”.

Patrick McLoughlin, the Transport secretary, added: “Arbitrary parking rules force shoppers online or to out of town stores, causing lasting damage to local firms and small shops.

“By making sensible changes such as providing more parking spaces for local shoppers we can help ease traffic flow whilst supporting our vibrant high streets.”

Value for money campaigners welcomed the plans. Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance said: “It’s absolutely right that the covert use of cameras to rack up fines should be restricted. Increasing numbers of councils are using parking fines to extract as much cash as possible from drivers instead of cutting wasteful spending.

“Motorists are already fed up of being cash cows, yet too many town halls see draconian parking restrictions as a way of raising revenue while ignoring the damage they do to already struggling high streets.

“The use of CCTV as a dragnet for fines is deeply unfair: it increases the likelihood of unjust penalties and undermines the public’s faith in the use of cameras for genuine reasons.”

But councils defended their record over parking fines.

Councillor Tony Ball, Vice chairman of the Local Government Association’s Economy and Transport Board, said: “Parking controls are not about revenue raising, they are absolutely essential for keeping the roads clear and making sure people can park near their homes and local shops.

“Camera cars have been instrumental in keeping children from being hurt or killed on the way to school, and CCTV plays an important role elsewhere in monitoring traffic flow and keeping cars moving.

“Nobody likes getting a parking fine but the fact that less than one per cent go to adjudication shows that in the vast majority of cases councils get it right.

“Income from on-street parking fines and charges is spent on parking services with any money left over spent on services like fixing potholes and providing subsidised bus travel to children and the elderly.”